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What should you know about estate planning basics?

On Behalf of | Jan 13, 2023 | Estate Administration

Estate planning allows you to establish your wishes on dividing up your assets. It also permits you to place a responsible and trusted individual in charge of your New Jersey estate in case you become incapacitated through an illness or accident. These important tasks make understanding the basics of estate planning essential.

Assets to consider

One of the most significant aspects of estate planning involves taking an inventory of your assets. Even if you do not possess an extreme amount of wealth, you likely still have property that you want to leave behind. Many people involved in estate planning include these types of assets:

• Vehicles
• Cash
• Jewelry
• Clothes
• Land
• Retirement accounts
• Savings and investments
• Physical property, such as your home
• Boats and other recreational vehicles

Consider end-of-life costs

Part of estate planning involves making plans for your death. This includes funeral expenses. For many people, life insurance will provide the finances necessary to cover these types of end-of-life costs. In other cases, life insurance may help pay for lasting debts.

Regardless of what end-of-life expenses you need life insurance to cover, you should keep these things in mind:

• The amount of your debts
• Whether your family needs an income replacement
• Burial wishes
• Potential education costs for your children
• Naming beneficiaries

Important directives

Most people think of a last will and testament when they consider estate planning. This document does allow you to provide legal directives for your estate after your death. However, you may also consider the following legal directives:

• Trusts
• Medical care directives
• Durable financial power of attorney
• Medical power of attorney

Make the grieving process easier

Estate planning can invoke unpleasant feelings while planning for the end of your life. However, proper estate planning helps to ease the number of difficult decisions your loved ones and beneficiaries need to make after your death. The knowledge of this benefit allows many individuals to move forward with thorough planning for their estate.